Thirty Three percent of mid-sized companies in the U.S. have incurred federal penalties for non-compliance with government regulations over the past year. Unfortunately, for the most part, the penalties do not seem to have occurred due to just one minor slip up - of the thirty-three percent that incurred penalties, around six non-compliance issues on average were found!
The study also found that businesses with in-house payroll processing received almost three times the number of penalties than those who outsourced their payroll processing. Organizations with in-house payroll processing had an average of six fines compared to two fines for companies with outsourced payroll operations.
Risk of non-compliance issues can be even more problematic when using temporary labor, because it is harder to keep track of all the temporary employees and contractors used throughout an organization. Often, multiple staffing vendors and employers are involved, and frequently departmental managers will “hide” temporary workers and contractors under other cost centers so that they can keep within their official headcount.
Because of the dramatic growth of the contingent workforce, government agencies such as the Department of Labor and the IRS, are taking a keener interest in the use of contingent workers – making it essential for companies to track the use of all types of flexible labor within their organizations. Also, as the research suggests, (yeah I know, it’s ADP research – but they DO have a point : ) , it pays to look into the stability and experience of the companies you engage to payroll and/or employ your contingent workforce.
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